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The Loan Agreement Contract serves as a fundamental legal instrument for Islamic financing transactions in Saudi Arabia. It is specifically designed for use when establishing a formal lending relationship between Islamic financial institutions and borrowers, ensuring compliance with both Sharia principles and Saudi Arabian law. The document comprehensively covers facility terms, profit calculations, security arrangements, representations, warranties, and covenants, while incorporating necessary provisions to meet SAMA regulations and Islamic banking requirements. This agreement is essential for documenting financial obligations, security arrangements, and party responsibilities in a manner that is enforceable under Saudi law and consistent with Islamic finance principles. The contract includes specific provisions for Sharia-compliant structures such as Murabaha or Ijara, making it suitable for various Islamic financing scenarios while maintaining legal certainty within the Saudi Arabian jurisdiction.

1. Parties: Identification of the lender and borrower with full legal names and addresses

2. Background: Context of the loan agreement and confirmation of Sharia compliance

3. Definitions: Key terms used throughout the agreement, including Islamic finance-specific terminology

4. Facility Details: Amount, purpose, and structure of the Islamic financing facility

5. Islamic Structure: Detailed explanation of the Islamic financing structure (e.g., Murabaha, Ijara) being used

6. Conditions Precedent: Prerequisites that must be satisfied before the facility becomes available

7. Disbursement: Terms and procedures for drawdown of the facility

8. Payment Provisions: Repayment schedule, profit rate, and payment mechanics

9. Security: Details of collateral and security arrangements

10. Representations and Warranties: Statements of fact and assurances from the borrower

11. Covenants: Positive and negative obligations of the borrower during the facility period

12. Events of Default: Circumstances that trigger default and remedies available

13. Undertakings: Specific promises and commitments by the borrower

14. Expenses and Indemnities: Allocation of costs and indemnification obligations

15. Changes to Parties: Rules for assignment and transfer of rights

16. Notices: Communication procedures between parties

17. Governing Law and Jurisdiction: Saudi law provisions and dispute resolution mechanisms